LISA BALDUCCI VS. BRIAN M. CIGE (L-1004-16, SOMERSET COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3068-16T2

LISA BALDUCCI,

Plaintiff-Respondent,
APPROVED FOR PUBLICATION

v. August 30, 2018

BRIAN M. CIGE, APPELLATE DIVISION

Defendant-Appellant.
___________________________

Submitted February 7, 2018 – Decided August 30, 2018

Before Judges Alvarez, Nugent and Geiger.

On appeal from Superior Court of New Jersey,
Law Division, Somerset County, Docket No. L-
1004-16.

Brian M. Cige, appellant pro se.

Nagel Rice, LLP, attorneys for respondent (Jay
J. Rice, of counsel and on the brief; Michael
J. Paragano, on the brief).

The opinion of the court was delivered by

NUGENT, J.A.D.

Defendant, Brian M. Cige, an attorney, appeals from two Law

Division orders. The orders declared unenforceable and void his

retainer agreement (the "Agreement") with plaintiff, Lisa

Balducci, a client he represented in a claim seeking damages under

the New Jersey Law Against Discrimination ("LAD"), N.J.S.A. 10:5-
1 to -49.1 The orders also dismissed his counterclaim for fees

and costs. The trial court permitted defendant to recover for his

services based on the doctrine of quantum meruit.

The trial court found defendant violated his professional

responsibility to explain the Agreement's material terms to

plaintiff so that she could make an informed decision about

retaining him. The trial court's factual and credibility findings

have ample support on the plenary hearing record. Defendant did

not explain the effect his "greater three fee agreement" would

have on any recovery, inform plaintiff of alternatives to such an

agreement, or give plaintiff any indication of the tens of

thousands of dollars in expenses she would have to pay as the case

progressed. Hence we affirm.

I.

A.

This action's procedural history began in July 2016 when

plaintiff filed a declaratory judgment action seeking to have the

trial court declare the Agreement unenforceable. Plaintiff had

retained defendant to represent her and her child in a LAD action.

She later terminated his representation and retained new counsel.

1
Plaintiff acted in a representative capacity, seeking LAD
remedies on behalf of her child, who was not yet an adult when
defendant filed the underlying LAD complaint.

2 A-3068-16T2
After plaintiff terminated defendant's services, he billed her for

$286,746.67 in fees and expenses. Defendant's lien against any

recovery impeded meaningful settlement negotiations, so plaintiff

filed the declaratory judgment action.

Defendant filed an answer. He also filed a counterclaim

seeking a judgment for fees and costs.2 Following a plenary

hearing, the trial court declared the fee agreement unenforceable.

This appeal followed.

B.

The parties developed the following record at the plenary

hearing. Plaintiff and defendant were friends when she and her

child met him at his office in September 2012 to discuss a possible

lawsuit seeking remedies under the LAD.3 During the meeting,

defendant presented plaintiff with the Agreement. The Agreement

included these terms:

3. Legal Fees. The Law Firm cannot predict
or guarantee what your final bill will be.
This will depend on the amount of time spent
on your case and the amount of other expenses.

2
A fee arbitration committee had exercised its discretion and
declined to arbitrate the fee dispute because the total fee at
issue exceeded $100,000. R. 1:20A-3(b)(3).
3
The complaint in the underlying action is not included in the
appellate record. During defendant's opening statement at the
plenary hearing and again during his testimony, defendant said
"from day one" the underlying action "had always been a LAD case."

3 A-3068-16T2
 A. Initial Payment. The Law Firm
will begin work on your case upon
receipt of $3750.00. This sum will
be used to pay for your initial
filing fee, other fees and expenses,
and legal fees, according to this
Agreement.

B. Retainer. You agree to pay
$7500.00* as the minimum retainer,
but maximum amount for legal fees to
be paid until the case is settled
or judgment is entered.
Notwithstanding, you are encouraged
to make additional payments toward
legal fees as invoiced to minimize
having a large invoice when the case
ends.

*$3750.00 to be paid within
ninety (90) days of signing this
agreement.

C. Legal Fee. You agree to pay the
Law Firm for legal services the
greater of:

i. Rate Per Hour Services of

$475.00 Brian M. Cige,
Esq.

(This hourly rates [sic] is subject to review
and revision 11 January 2014 and annually
thereafter. Further, at the Law Firm's
discretion, it may either use the rates which
were current when the services were performed
and adding interest at the regular rate for
paying clients or using the rate current at
the time payment is made.)

ii. thirty seven and one half
percent (37 1/2%) of the net
recovery (including attorneys fees
referred to in iii below).

4 A-3068-16T2
 iii. statutory attorneys fees, by
settlement or award, received with
credit for all payments received.

Client has been advised that, in
employment cases, the employer may offer
reinstatement of his or her prior position or
a comparable position. In the event the
client accepts an offer of reinstatements, the
client agrees to pay the Law Firm fifteen
additional percent (15%) of the total pay he
or she would receive from the employer upon
reinstatement for a one (1) year pay period,
in no more than six (6) equal monthly
installments.

D. All Services Will Be Billed.
You will be billed at the hourly
rate set forth in paragraph 3C for
all services rendered. This
includes telephone calls (minimum
charge of [six] minutes), dictating
and reviewing letters, travel time
to and from meetings and the Court,
legal research, negotiations and
any other services relating to this
matter. Client hereby gives the Law
Firm a continuing lien on the
client's claim and the proceeds
thereof for the amount of the
attorney's fees, out-of-pocket
expenses, and costs for which the
client is obligated under this
agreement. The attorney's lien is
given by the client pursuant to New
Jersey State [sic] Annotated Title
2A:13-5.

4. Costs and Expenses. In addition to legal
fees, you must pay the following costs and
expenses: experts' fees, court costs,
accountants' fees, appraisers' fees, service
fees, investigators' fees, deposition costs,
messenger services, photocopying charges,
telephone toll calls, postage and any other

5 A-3068-16T2
 necessary expenses in this matter. The Law
Firm may require that expert(s) be retained
directly by you. You would then be solely
responsible to pay the expert(s).

5. Bills. The Law Firm will send you
itemized bills from time to time. The Law
Firm may require that costs and expenses (see
paragraph 4) be paid in advance. All bills
for costs and legal expenses are due upon
receipt and failure to pay will waive any
discounts. You will be charged interest at a
monthly rate of one and one-half percent (1½%)
on any remaining balance not paid within
thirty (30) days from the date of the bill.
If an outstanding balance necessitates
collection efforts by the Law Firm will be
paid its legal fees for collecting same.
Further, at the Law Firm's discretion, it may
either use the rates which were current when
the services were performed and adding
interest at the regular rate for paying
clients or using the rate current at the time
payment is made.

The parties disputed the circumstances under which plaintiff

signed the Agreement. According to plaintiff, defendant did not

explain the terms of the Agreement. Rather, he told her, "[t]his

is a standard agreement for a case like [this]." Plaintiff, who

had worked for attorneys and who now operated her own business,

"quickly glanced at it and . . . had a concern." She said to

defendant, "Brian, this says that I am going to be responsible at

the end if we lose the case." He said she would not. He told her

the language concerning his hourly rate was standard for a LAD

case like this. He said: "We are friends. I was at your wedding.

6 A-3068-16T2
I would never do this to you. Ignore that. Don't worry about it.

It is standard information." Plaintiff signed it, because she

trusted him, he was a friend, and she believed him.

In contrast, defendant testified, "plaintiff was provided

this. Read it. Understood it. And signed it." Defendant

emphasized the "Signatures" paragraph of the agreement, located

immediately above the signature lines, stated: "You and the Law

Firm have read and agree to this Agreement. The Law Firm has

answered all of your questions and fully explained this Agreement

to your complete satisfaction. You have been given a copy of this

Agreement." Defendant denied telling plaintiff he would not

enforce the Agreement's hourly rate provision. He testified, "I

provided her with the retainer agreement in my office. I asked

her if she had any questions after she reviewed it. And she signed

it. And we were on our way."

Plaintiff's child testified and corroborated plaintiff's

testimony. The child said defendant told plaintiff not to worry

about legal fees if the case was lost. The child was emphatic

defendant said he would never do that to plaintiff because they

were friends.

Plaintiff testified that after retaining defendant, she began

receiving monthly bills for defendant's services. Extremely

upset, she telephoned defendant and asked the meaning of the bills.

7 A-3068-16T2
He said: "Lisa, I have to by law keep track of the billing, . . .

but I know they look a lot, . . . but I am padding them. So at

the end of the day when they are found guilty of L-A-D at the very

least, then the [defendants'] attorneys will have to pay for it

and you will not have to have those fees." Plaintiff said

defendant agreed to stop sending the bills because he realized how

much they upset her.

Defendant acknowledged plaintiff became upset when she

received bills based on his hourly fee, so he stopped sending

them. He denied he stopped sending them for the reason given by

plaintiff. He claimed he had agreed she could defer payment.

The fee agreement is dated September 7, 2012. Plaintiff

terminated defendant's services in September or October 2015. The

parties' attorney-client relationship had begun to sour ten months

earlier, in January 2015.

The problems developed, according to plaintiff, when

depositions began in the underlying case. Plaintiff testified she

was exhausted but was nonetheless doing much of the work to prepare

for depositions while defendant was away at chess tournaments. To

review material in preparation for depositions, plaintiff and her

child went to defendant's office. Plaintiff said defendant

required her to "pay his paralegal in which to keep the office

open so both my [child] and I could work and prepare for

8 A-3068-16T2
depositions." Plaintiff authenticated a check for $100 she paid

to defendant's paralegal.4

In March 2015, in an exchange of e-mails, plaintiff asked

defendant to "please confirm what [sic] the agreement to handle

[the] case we signed was for 1/3 (30%)?" Defendant replied by

sending an e-mail stating, "[p]lease see attached. Not [thirty

percent] as you thought, [thirty-seven and one-half percent]."

Defendant attached an electronic copy of the fee agreement.

Plaintiff testified defendant's e-mail did not mention the hourly

rate, which she assumed was because he had previously told her to

ignore that part of the fee agreement.

During the last week of April 2015, the parties again

exchanged e-mails. On April 23, plaintiff wrote:

Brian, I understand you wish to avoid
this topic however, I have endlessly been
asking - how much are the experts FEES and I
am unable to come up with $50,000 - $100,000
in expert fees so I have a large firm willing
to absorb those fees if necessary – when we
last met you said your billing was around
$100,000 or $120,000 I told other firm same
and deps were almost done as we are waiting

4
The appellate record contains a copy of the check with a notation
below it that defendant and his paralegal "said no more in checks
only cash so no paper trail – it would complicate billing?"
Plaintiff testified to this and said she "did a second check."
Defendant objected to the testimony as hearsay and the judge struck
it. For this reason, we disregard both the testimony about the
second check and the notation concerning it in the appellate
record.

9 A-3068-16T2
 judges decision. We need to discuss this
because this case is moving forward quickly.

In September or October 2015, plaintiff terminated her

attorney-client relationship with defendant. She had repeatedly

voiced to defendant she was unhappy with his lack of preparation

for depositions. Documents were missing, and defendant kept

insisting she be patient because his paralegal was ill and having

memory issues. Plaintiff noted one instance in which depositions

had to be stopped while she went to defendant's office to try to

find certain discovery. She was also unhappy that he had attended

chess tournaments and left her to prepare for depositions in his

office without his assistance.

In addition, defendant sent plaintiff an invoice dated

September 2, 2016, for $12,400.61 in disbursements. Within

approximately a month of receiving the invoice, plaintiff

terminated the attorney-client relationship. Nearly four months

later, on January 29, 2016, defendant invoiced plaintiff

$15,955.45 for expenses.

Defendant had not specified in the Agreement amounts he would

charge plaintiff for routine expenses. His invoice included

twenty-five cents per page for photocopying, one dollar for every

e-mail defendant sent or received, one dollar for every facsimile,

and fifty-five cents per mile for travel. The invoice included

10 A-3068-16T2
$1700 for e-mails. Defendant also admitted that in addition to

charging plaintiff for every e-mail he sent or received, he charged

for his time.

After plaintiff communicated to defendant that she was

terminating his services, defendant told plaintiff she had to pay

him approximately $250,000 based on his hourly rate for the

services he had rendered. Plaintiff was emphatic that she would

never have signed the Agreement, and she would have gone to another

firm, had she known defendant would hold her responsible for his

hourly rate.

Defendant disputed much of plaintiff's testimony. He first

testified about his background. He testified his experience

included more than twenty-five years of litigating LAD cases. He

also had lectured on LAD claims for the Institute of Continuing

Legal Education. He had little experience, however, litigating

the type of claim for which plaintiff retained him. In fact, he

had never tried such a case. He was not a certified civil trial

attorney, Rule 1:39, and had tried only ten or twelve jury trials

during his thirty-three years practicing law.

Defendant insisted plaintiff clearly understood the "hourly"

component of the fee agreement. Otherwise, he would not have sent

her bills on a regular basis. He asserted, "if plaintiff did not

understand . . . she had an obligation to pay the hourly rate

11 A-3068-16T2
billed, then it makes no sense that she would have been upset when

she got the hourly billing, because she would have had no

obligation." Defendant claimed his hourly rate did not become an

issue until plaintiff switched attorneys.

Defendant's perspective was the attorney-client relationship

began to sour when plaintiff had to pay deposition costs. She

also complained about the ongoing expenses, for which she was

responsible, as clearly stated in the Agreement. He explained

that he used an outside source for photocopying and merely passed

on the expenses. He had nothing to do with what she was charged.

In fact, based on plaintiff's complaints about the photocopying

charges, he negotiated a reduction with the provider.

Defendant also claimed plaintiff randomly expressed concerns

that he was not being taken seriously because he was a solo

practitioner. She commented she would do better with a big firm.

Defendant surmised what brought the relationship "to a head" was

a conversation concerning the value of the case. He communicated

an opinion about the value of the case — based on his discussion

with another practitioner — and she became very upset because she

thought it was worth millions of dollars. He denied he had charged

plaintiff for keeping his office open at night.

During cross-examination, defendant admitted he did not tell

plaintiff he had never tried the type of case he would be handling

12 A-3068-16T2
for her. Nor did defendant project for plaintiff what her

anticipated fees would be based on his hourly rate and the time

it would take to complete the case. Although he admitted billing

over $250,000 for the time he expended in the underlying case, he

did not tell plaintiff he knew, from experience, his hourly

billings could exceed $100,000 if the case was not resolved before

trial. Nor did he explain that his fee for handling the case,

billed at his hourly rate, could exceed the amount of a settlement

or a jury verdict.

C.

In its written opinion, the trial court found "that a

reasonable client would have understood [d]efendant's retainer

agreement to establish a payment structure much like most other

contingent fee agreements — that [p]laintiff would only be

obligated to pay if she was successful on her suit." The court

found defendant was obligated by the Rules of Professional Conduct

(RPCs) "to communicate clearly that his fee structure was

different, and [p]laintiff would be obligated to pay regardless

of the success of her case, so that [p]laintiff could make an

informed decision as to whether she was willing to accept such an

agreement." Resolving credibility issues in favor of plaintiff,

the court found that no such discussion took place. The court

added, however, that notwithstanding the credibility issues, "it

13 A-3068-16T2
is clear [d]efendant breached his duty to ensure [p]laintiff was

adequately informed regarding the terms of the fees [d]efendant

would be entitled to."

The court also found defendant violated his duty under the

RPCs "by failing to articulate how expensive [p]laintiff's matter

could ultimately be, and what recovery [p]laintiff could expect

(within reason)." The court determined such information was

"clearly material and necessary to permit [p]laintiff to make an

informed decision regarding representation." In so finding, the

court noted defendant did not counsel plaintiff as to what a

reasonable settlement offer would be but instead communicated to

the adversaries plaintiff's uneducated settlement demand of

$3,500,000.

The trial court also took issue with the costs defendant

charged plaintiff, noting the fee agreement "clearly failed to

identify numerous costs [d]efendant would ultimately liberally

charge [p]laintiff with, including, most egregiously, $1 per e-

mail sent and received."

The trial court found credible plaintiff's testimony that had

she known she would be charged an hourly rate even in the event

her claims were unsuccessful, she would never have agreed to

defendant representing her. Considering the nature of plaintiff's

claims, evidence her new attorney presented concerning awards

14 A-3068-16T2
received by similarly situated plaintiffs, and defendant's lien,

the court expressed its inclination to "credit all testimony

positing that [p]laintiff was misled by [d]efendant throughout the

course of his representation of her."5

For the reasons expressed in its opinion, the court entered

an order declaring the retainer agreement unenforceable and void.

II.

On appeal, defendant argues the retainer agreement is

enforceable because it is in writing and signed by the parties.

He asserts he complied with the RPCs by discussing and explaining

to plaintiff her obligations under the agreement. Defendant

contends the trial court committed reversible error by holding a

plenary hearing without affording the parties an opportunity for

discovery. He also contends the court committed trial errors by

failing to address the parol evidence rule and by failing to grant

a directed verdict on his counterclaim.

In addition to his allegations of error, defendant asserts

the trial court's procedural and evidentiary rulings and decision

voiding the retainer agreement were motivated by the court's desire

to facilitate a settlement of the underlying claim. For that

5
The attorneys who represented plaintiff in her fee dispute with
defendant were not the same attorneys who represented her in the
LAD action after she discharged defendant.

15 A-3068-16T2
reason, defendant requests the court be disqualified in the event

of a remand.

Plaintiff responds the record supports the trial court's

findings as well as its credibility determinations. Plaintiff

contends discovery was unnecessary. She points out defendant did

not object to the plenary hearing when it was scheduled. Plaintiff

adds that nothing in the record supports defendant's claim that

the trial court was biased, so there is no basis for disqualifying

the court if the matter is remanded.

Defendant replies for the most part by reiterating and

emphasizing the points he raised in his original brief.

III.

Our review of "[f]inal determinations made by the trial court

sitting in a non-jury case . . . [is] limited and well-

established." Seidman v. Clifton Sav. Bank, 205 N.J. 150, 169

(2011). The court's findings of fact are "binding on appeal when

supported by adequate, substantial, credible evidence." Cesare

v. Cesare, 154 N.J. 394, 411-12 (1998) (citation omitted). "[W]e

do not disturb the factual findings and legal conclusions of the

trial [court] unless we are convinced that they are so manifestly

unsupported by or inconsistent with the competent, relevant and

reasonably credible evidence as to offend the interests of

justice." In re Forfeiture of Pers. Weapons & Firearms

16 A-3068-16T2
Identification Card Belonging to F.M., 225 N.J. 487, 506 (2016)

(quoting Rova Farms Resort, Inc. v. Inv'rs Ins. Co., 65 N.J. 474,

484 (1974)).

The hearing record in the case before us includes adequate,

substantial, credible evidence supporting the court's decision.

Plaintiff testified defendant did not explain the terms of the

Agreement to her. Defendant admitted he did not explain to

plaintiff that the cost of his services, based on his hourly rate

and liberal billing practices, could approach or exceed

plaintiff's recovery. More important, plaintiff testified

defendant represented – or misrepresented as the case may be –

that he would not charge her his hourly rate. Plaintiff's child

also testified defendant made the representation. The testimony

of these witnesses amply supports the trial court's findings.

Plaintiff's testimony, the testimony of her child, and the

documentary evidence readily dispel any notion the trial court's

findings and legal conclusions are so manifestly unsupported by

or inconsistent with the competent, relevant, reasonably credible

evidence as to offend the interest of justice. Rova Farms, 65

N.J. at 484. That alone is ample reason to affirm the order

nullifying the Agreement. But because the Agreement is ambiguous

if not misleading, particularly in the context of a fee-shifting

claim, we address the trial court's opinion that defendant breached

17 A-3068-16T2
his ethical obligations to fully inform plaintiff of the

Agreement's ramifications.

IV.

A.

The Agreement in this case concerns a statutory fee-shifting

claim. Because defendant's ethical obligations to the client

arose — and thus must be understood — in that context, we briefly

review the policies underlying the LAD.

The "LAD is remedial social legislation whose overreaching

goal is to eradicate the 'cancer of discrimination.'" Nini v.

Mercer Cty. Cmty. Coll., 202 N.J. 98, 108-09 (2010) (quoting

Fuchilla v. Layman, 109 N.J. 319, 334 (1988)). "Underlying the

LAD's expansive language advocating the elimination of

discrimination is also the directive that we compensate victims

for economic and noneconomic injuries attributable to . . .

discriminatory conduct." Tarr v. Ciasulli, 181 N.J. 70, 80 (2004).

The Legislature has recognized a discrimination victim's

hardships:

The Legislature further finds that
because of discrimination, people suffer
personal hardships, and the State suffers a
grievous harm. The personal hardships
include: economic loss; time loss; physical
and emotional stress; and in some cases severe
emotional trauma, illness, homelessness or
other irreparable harm resulting from the
strain of employment controversies;

18 A-3068-16T2
 relocation, search and moving difficulties;
anxiety caused by lack of information,
uncertainty, and resultant planning
difficulty; career, education, family and
social disruption; and adjustment problems,
which particularly impact on those protected
by this [A]ct. Such harms have, under the
common law, given rise to legal remedies,
including compensatory and punitive damages.
The Legislature intends that such damages be
available to all persons protected by this
[A]ct and that this [A]ct shall be liberally
construed in combination with other
protections available under the laws of this
State.

[N.J.S.A. 10:5-3 (emphasis added).]

The LAD fee-shifting provision, N.J.S.A. 10:5-27.1, entitles

a plaintiff to an award of attorneys' fees if the plaintiff has

been "awarded some affirmative relief by way of an enforceable

judgment against defendant or other comparable relief through a

settlement or consent decree." Tarr, 181 N.J. at 86-87.

The Supreme Court has determined what constitutes a

"'reasonable attorney's fee,' payable under fee-shifting statutes

such as the LAD." Rendine v. Pantzer, 141 N.J. 292, 316 (1995).

A trial court considering a reasonable fee must "determine the

'lodestar': the number of hours reasonably expended multiplied by

a reasonable hourly rate." Id. at 334-35. The trial court should

exclude hours not reasonably expended. Id. at 335. In determining

whether an attorney's hourly rate is reasonable, "the court should

assess the experience and skill of the prevailing party's attorneys

19 A-3068-16T2
and compare their rates to the rates prevailing in the community

for similar services by lawyers of reasonably comparable skill,

experience and reputation." Id. at 337 (quoting Rode v.

Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990)).

After determining the lodestar, a trial court "should

consider whether to increase that fee to reflect the risk of non-

payment in all cases in which the attorney's compensation entirely

or substantially is contingent on a successful outcome." Ibid.

The Supreme Court has "conclude[d] that contingency enhancements

in fee-shifting cases ordinarily should range between five and

fifty-percent of the lodestar fee, with the enhancement in typical

contingency cases ranging between twenty and thirty-five percent

of the lodestar." Id. at 343.

Statutory fee-shifting provisions and awards are "'designed

to attract competent counsel' to advance the public interest

through private enforcement of statutory rights that the

government alone cannot enforce." Pinto v. Spectrum Chem. & Lab.

Prods., 200 N.J. 580, 593 (2010) (quoting Coleman v. Fiore Bros.,

113 N.J. 594, 598 (1989)). They also advance the policy that

damages be available to all persons protected by the LAD. A

court's award of fees under the LAD's fee-shifting provision does

not diminish LAD damages available to a plaintiff, because the

defendants must pay the statutory fee award.

20 A-3068-16T2
 In contrast, in the absence of a statutory fee award, an

attorney's hourly fee can approach or exceed a LAD client's

recovery for economic and non-economic loss caused by

discrimination. Such an hourly fee arrangement undermines both

the LAD policy of compensating victims of discrimination and the

policy of attracting competent counsel to advance the public

interest through private enforcement of statutory rights while

bearing the risk of nonpayment in the event of an unsuccessful

outcome. What's more, such a fee arrangement can be financially

devastating to a client.

There is no dearth of competent, civic-minded attorneys

willing to litigate LAD and other statutory fee-shifting cases

under fee agreements that do not include an hourly component. The

number of such cases litigated in our trial courts and reported

in the case law evidence this, as does — at least as to numbers —

advertising on television and radio, in telephone books and

newspapers, and on billboards and other media. Indeed, the firm

currently representing plaintiff in the LAD action has a fee

agreement without an hourly component.

Ethically then, must an attorney whose fee for undertaking a

LAD case that includes an hourly rate component explain both the

consequences on a recovery and the availability of other competent

counsel likely willing to undertake the same representation based

21 A-3068-16T2
on a fee without an hourly component? We conclude the answer is

yes.

B.

In a LAD case, as in any case, "[a] lawyer's fee shall be

reasonable." RPC 1.5(a). Fee agreements in LAD cases are subject

to the same ethical considerations as all contracts between lawyers

and clients. In view of "the unique and special relationship

between an attorney and a client, ordinary contract principles

governing agreements between parties must give way to the higher

ethical and professional standards enunciated by our Supreme

Court." Cohen v. Radio-Electronics Officers Union, 275 N.J. Super.

241, 259 (App. Div. 1994), modified on other grounds, 146 N.J. 140

(1996). For that reason, a "contract for legal services is not

like other contracts." Ibid.

The Rules of Professional Conduct require that "[w]hen the

lawyer has not regularly represented the client, the basis or rate

of the fee shall be communicated in writing to the client before

or within a reasonable time after commencing the representation."

RPC 1.5(b). Contingent fee agreements:

[S]hall be in writing and shall state the
method by which the fee is to be determined,
including the percentage or percentages that
shall accrue to the lawyer in the event of
settlement, trial, or appeal, litigation and
other expenses to be deducted from the
recovery, and whether such expenses are to be

22 A-3068-16T2
 deducted before or after the contingent fee
is calculated.

[RPC 1.5(c).]

Equally important, "[a] lawyer shall explain a matter to the extent

reasonably necessary to permit the client to make informed

decisions regarding the representation." RPC 1.4(c).

Maximizing fees charged to clients should not be an attorney's

primary aim. As a scholar on legal ethics once wrote:

After an educational process emphasizing the
importance of preparation and indeterminacy of
outcomes, most lawyers will prefer to leave
no stone unturned, provided, of course, they
can charge by the stone. For an attorney
anxious to avoid overlooking details and
underbilling hours, more is always better.
For the client and the courts, the calculus
may be otherwise.

[Deborah L. Rhode, Ethical Perspectives on
Legal Practice, 37 Stan. L. Rev. 589, 635
(1985).]

"An '[a]ttorney[] must never lose sight of the fact that the

profession is a branch of the administration of justice and not a

mere money-getting trade.'" Alpert, Goldberg, Butler, Norton &

Weiss, PC v. Quinn, 410 N.J. Super. 510, 529 (App. Div. 2009)

(alterations in original) (quoting Kriegsman v. Kriegsman, 150

N.J. Super. 474, 480 (App. Div. 1997)).

For the foregoing reasons, an "attorney's freedom to contract

with a client is subject to the constraints of ethical

23 A-3068-16T2
considerations and [the Supreme Court's] supervision." Id. at

529-30 (alteration in original) (quoting Cohen, 146 N.J. at 155).

"An agreement that violates the ethical rules governing the

attorney-client relationship may be declared unenforceable." Id.

at 530 (quoting Tax Auth. v. Jackson Hewitt, 187 N.J. 4, 15

(2006)).

The application of these principles to the facts of this case

leads to a single conclusion: the trial court properly found the

Agreement was unenforceable and void.

C.

The Agreement in this case – requiring the client to pay the

greater of defendant's hourly rate ("the hourly provision"),

thirty-seven and one-half of the net recovery including statutory

attorneys' fees (the "contingent fee provision"), or statutory

attorneys' fees (the "statutory fee provision") — is problematic

if not misleading. The statutory fee provision may be the only

one of the three in which plaintiff receives full compensation,

because the statutory fee is payable by the defendants in the

underlying case. Yet, the likelihood of it materializing is

largely illusory.

This is so, because the Supreme Court has directed that a

trial court consider a fee enhancement to the lodestar "to reflect

the risk of nonpayment in all cases in which the attorney's

24 A-3068-16T2
compensation entirely or substantially is contingent on a

successful outcome." Rendine, 141 N.J. at 337. The standards the

Court adopted in Rendine "serve as limits on the amount of

contingency enhancements and . . . require a relationship between

the amount of the enhancement awarded and the extent of the risk

of nonpayment assumed by counsel for the prevailing party." Id.

at 339. Here, defendant bore no risk of nonpayment. If he and

plaintiff recovered nothing, he was nonetheless entitled under the

Agreement to have plaintiff pay the full value of his services.

In such situations, where an attorney assumes no risk, a trial

court following Rendine would presumably award no fee enhancement.

Thus, at most, the statutory fee provision would be no greater

than the Agreement's hourly fee provision.

In the case before us, the statutory fee would likely be

less, in view of plaintiff's testimony that defendant said he was

padding his bills and in view of questionable billing practices

cited by the trial court or exposed during cross-examination of

defendant.6 Thus, the statutory fee provision — likely the only

6
Our comments should not be construed as suggesting our view
either that the hourly rate in this case was or was not excessive
for an attorney who had never tried the specific type of claim,
was not certified by the Supreme Court as a civil trial attorney,
and only tried cases once every two or three years. That issue
was not before the trial court and there was no evidence presented
concerning it.

25 A-3068-16T2
one that would potentially have allowed plaintiff to retain full

compensation for her damages - was unlikely to materialize.

The Agreement's contingent fee provision is also problematic

to the extent it is computed on both plaintiff's damages and the

statutory fee award and can result in a fee that exceeds both —

at the expense of what the client receives. Certainly, an attorney

is entitled to receive the higher of the two, even if a reasonable,

conscionable, contingent fee applied to a large damage award

results in a fee far exceeding a statutory fee award. Lawyers who

bear a risk of loss and obtain such results deserve to be

compensated accordingly. And though a contingent fee reduces a

LAD plaintiff's damages, the balancing of competing policies

compels the result.

The question, though, is why in view of the LAD's underlying

policies should counsel receive in excess of the greater of a

conscionable contingent fee computed on a damage award, or a

statutory fee award — reasonable by virtue of judicial

determination — if the excess diminishes the client's compensation

for damages. Counsel may argue that because a statutory fee award

is part of the client's recovery obtained through the attorney's

efforts, the attorney should be entitled to a contingent percentage

26 A-3068-16T2
of the fee award.7 But an attorney's hourly rate for pursuing the

statutory fee award is included in the award itself — an award,

again, that has been determined by the court to be reasonable. So

if the attorney's work in obtaining the statutory fee award is

reflected in the award — an award adjudicated as reasonable — and

the attorney is receiving more based on a contingent fee, why

should a plaintiff's damage award be reduced even more? The issue

is further complicated, in most cases, by the absence of an

advocate to advance the point on behalf of a client, perhaps an

uninformed client.8

We do not find the Agreement in this case unenforceable

because of the problematic nature of the three fee provisions. We

do find the Agreement unenforceable because, as the trial court

found, defendant did not adequately inform plaintiff about the

ramifications.

7
See A.W. v. Mount Holly Twp. Bd. of Educ. (In re Costello &
Mains, LLC), 453 N.J. Super. 110, 114 (App. Div. 2018).
8
These issues are recurring. See A.W., 453 N.J. Super. at 113-
114 (involving a fee agreement requiring the client to pay the
greater of forty-five percent - an arguably excessive and
unconscionable contingent fee – of the net recovery, including
negotiated or statutory legal fees, or the firm's hourly rate).
We are also aware of attorneys seeking payment of a substantial
contingent fee plus a statutory fee award. One such case has been
decided within the past month. The Civil Practice Committee or
some other appropriate Supreme Court Committee should perhaps
address these issues.

27 A-3068-16T2
 Based on defendant's experience, he certainly understood his

hourly fee could approach or exceed a settlement offer, perhaps

even plaintiff's recovery, if the case resolved shortly before or

at a trial. If defendant did not know that from his experience

with LAD cases, he should have known it from case law. During the

twenty-three years that have passed since the Court decided

Rendine, it has become evident that an attorney's hourly fee for

a LAD case can approach or exceed a plaintiff's recovery. See

e.g., Szczepanski v. Newcomb Med. Ctr., 141 N.J. 346, 352-53 (1995)

(addressing plaintiff's statutory fee application for lodestar of

$135,360 based on $200 per hour rate after judgment on jury verdict

of $115,441, including prejudgment interest); Kluczyuk v.

Tropicana Products, Inc., 368 N.J. Super. 479, 484 (App. Div.

2004) (affirming award to plaintiff's counsel of $315,547.45

combined lodestar and enhancement on jury award of $454,315);

Gallo v. Salesian Soc'y, 290 N.J. Super. 616, 622 (App. Div. 1996)

(affirming trial court's reduced award to plaintiff's counsel of

$48,750, from fee request exceeding $100,000 for more than 400

hours of work, following jury verdict in plaintiff's favor in the

amount of $24,000); Davis v. Husain, No. A-2691-11 (App. Div. Mar.

13, 2013) (slip op. at 6, 26-27) (affirming trial court's lodestar

computation of $68,095 but reversing the trial court's denial of

fee enhancement on jury's damage verdict of $12,500); Heusser v.

28 A-3068-16T2
N.J. Highway Auth., No. A-0622-05 (App. Div. Mar. 20, 2008) (slip

op. at 52-53) (awarding lodestar of $312,659.15 to counsel who

obtained a $97,198 award).9

In view of the depleting effect a large hourly fee can have

on a plaintiff's recovery in a LAD action, in order to make an

informed decision about whether to retain counsel, a client should

understand that other competent counsel may accept the case solely

on a contingent fee basis. Given the choice, a plaintiff might

reject a retainer agreement — as plaintiff here would have done –

that contains an hourly component. Regardless, a potential client

should be given that information in order to make a knowing and

intelligent decision when selecting counsel. An attorney thus has

an ethical obligation to so inform a client.

In addition, an attorney is ethically obligated to provide

information about litigation costs a client must advance. A client

— such as plaintiff here — should understand she will be expected

to "front" thousands of dollars, perhaps, as here, tens of

thousands of dollars, depending on such things as the number of

9
The unreported opinions are not cited as precedent, Rule 1:36-
3, but solely for the limited purpose of presenting relevant but
general background and history. See Pressler & Verneiro, Current
N.J. Court Rules, cmt. 2 on R. 1:36-3 (2018); State v. Western
World, Inc., 440 N.J. Super. 175, 179 n.1 (App. Div. 2015); Badiali
v. N.J. Mfrs. Inc. Grp., 429 N.J. Super. 121, 126 n.4 (App. Div.
2012), aff'd, 220 N.J. 544 (2015).

29 A-3068-16T2
depositions to be taken and whether experts are retained; whereas

other competent counsel may advance costs.

In summary, we conclude that if an attorney's fee in a LAD

or statutory fee-shifting case is based in whole or in part on an

hourly rate, then the attorney is ethically obligated to inform

the client of the ramifications. The attorney must inform the

client that if the case becomes complex and protracted, the hourly

rate-based fee the client is responsible to pay can approach or

even exceed his or her recovery. Further, the attorney must inform

the client other competent counsel represent clients in similar

cases solely on a contingent fee basis, without an hourly

component, and might also advance costs. The attorney should

provide examples of how much hourly fees have totaled in similar

cases, or if the attorney has no such experience with similar

cases — in which case consideration should be given to referring

the case to a certified civil trial attorney — how much hourly

fees have totaled in the same types of cases found in case law.

Similarly, if the client is required to advance costs, the

attorney must provide the client with approximate costs resulting

from things such as depositions and expert fees, and must give

examples of such costs in similar cases. The attorney must

disclose that other competent counsel who represent clients in

similar cases advance litigation costs.

30 A-3068-16T2
 We understand no two cases are the same, and fees and costs

are not predictable with precision. But counsel charging high

hourly rates as part of fee agreements in fee-shifting cases are

presumably doing so based on their experience in handling such

cases — as defendant proclaimed here. Surely, such experienced

counsel are able to estimate the time and expenses to litigate

such claims through certain phases and to estimate the cost of

events such as depositions and the fees of experts.

The Agreement in this case has other flaws. Nearly nine

years ago, we emphasized that "[f]ull and complete disclosure of

all charges which may be imposed on the client is also necessitated

by RPC 1.4(c)." Alpert, 410 N.J. Super. at 531. The reason is

clear: "[i]f the client does not know what charges and costs beyond

the hourly rate he may be exposed to, how can the client be

expected to make an informed decision regarding representation."

Ibid. Here, defendant did not make full and complete disclosure

of costs he intended to pass on to the client, including his

"egregious" charges for e-mails. We also find questionable the

Agreement's additional fee of fifteen percent of one year's wages

in the event a client who has lost a job based on discrimination

is reinstated.

For all the foregoing reasons, we find no error in the trial

court's decision.

31 A-3068-16T2
 V.

The fee agreement in this case is ambiguous and to some extent

illusory. Defendant failed to discharge his ethical obligation

to explain the terms of the agreement, their implications, and

alternatives to the agreement, so the client could make an informed

decision regarding his representation. The trial court did not

err by so finding.

Defendant's remaining arguments are without sufficient merit

to warrant further discussion. R. 2:11-3(e)(1)(E).

Affirmed.

32 A-3068-16T2